Trump's SEC Pick Likely to Give Wall Street an Easier Enforcement Ride

As President-elect Donald Trump prepares to take office, his choice for the next Chair of the Securities and Exchange Commission (SEC), former Commissioner Paul Atkins, is expected to bring significant changes to the agency's enforcement priorities and approach. Atkins, a Republican, has been critical of the current Chair Gary Gensler's regulatory methods and has advocated for a lighter-touch approach. This shift in leadership is likely to have a substantial impact on Wall Street, potentially making the enforcement environment more lenient.

Atkins' appointment signals a potential shift away from the SEC's recent focus on cryptocurrency regulation, ESG initiatives, and "broken windows" enforcement. These areas have drawn vocal dissatisfaction from industry stakeholders and members of Congress. Instead, Atkins may prioritize traditional enforcement areas such as retail investor protection, Ponzi schemes, and insider trading. He is also expected to use staff guidance and rulemaking to encourage compliance among market participants, rather than relying on enforcement actions.



Atkins' stance on crypto, cybersecurity, and other controversial areas is likely to influence the agency's enforcement actions and rulemaking agenda. He has been critical of the SEC's approach to crypto, advocating for a more collaborative and achievable regulatory path. This could lead to a pullback from enforcement actions like the Coinbase and Binance cases, and a greater emphasis on industry engagement. Additionally, Atkins may adopt a more lenient approach to cybersecurity disclosures, focusing on material omissions rather than hindsight-based challenges.

However, the new SEC Chair may face challenges in implementing his vision for the agency. The SEC's recent litigation setbacks and a more skeptical judiciary may require a pullback from some of the agency's more aggressive enforcement actions. Additionally, the SEC's expanded enforcement reach over the last four years may need to be scaled back, as it arguably wandered beyond its statutory mandate. To address these challenges, the new Chair may focus on traditional enforcement priorities, use staff guidance and rulemaking to encourage compliance, and shift the agency's focus away from contentious areas.

In conclusion, the appointment of former Commissioner Paul Atkins as SEC Chair under President Trump is expected to bring significant changes to the agency's enforcement priorities and approach. Atkins' lighter-touch approach and focus on traditional enforcement areas are likely to make the enforcement environment more lenient for Wall Street. However, the new Chair may face challenges in implementing his vision, and the ultimate impact on the agency's enforcement actions and rulemaking agenda remains to be seen.